The Question of Why

One woman paid off Christmas layaway accounts for complete strangers.  What would you do if you had money instead of debt?

Getting out of debt is hard.  If it were easy, everyone would do it.  When my husband and I first started following the Dave Ramsey plan, I often heard him say that knowing whyyou’re getting out of debt is important.  I didn’t fully understand what he meant until recently.  For the first year that we followed the debt snowball plan, my husband and I were paying off debt to gain some peace and simplicity in our lives.  We didn’t really articulate this out loud to each other; it was more of a quiet understanding.  

The Thing That Couldn’t Die, Part 3: “I’m So Bored!”

Lindsay Lohan, in a still from Liz and Dick

When we first decided to get out of debt, I thought the hardest part would be finding enough extra money in the budget to actually put a dent in our student loans.  We always seemed to just break even with our income and expenditures, so I figured it was going to be tough finding more than maybe one or two hundred dollars to spare at the end of each month.  That certainly wasn’t going to get us out of $100K in student loan debt any time soon.

It turns out that finding extra money wasn’t that difficult.  Once we drew up our budget, got on the envelope system, and cut out most unnecessary spending, we found plenty of money to roll into our debt snowball.  When we paid off our car in only a few months, I felt like we were really on a roll.  And then, as we got to the bigger loans, the ones that were going to take more than just a few months to pay off, I realized I had been completely wrong about why getting out of debt is so difficult.  

It’s not the money.  It’s the sheer, unadulterated boredom.

Money Doesn't Fix Poverty

Has anyone else out there read John Cheese’s article on “The 5 Stupidest Habits You Develop Growing Up Poor?”  I highly recommend it, particularly for those of us who grew up never knowing when the electricity was going to get shut off (hopefully not when a friend was visiting) and/or were taught how to dodge collection calls from the time we first learned how to use a telephone.   

Cheese’s theory is that those of us who grew up poor developed a certain mindset that stays with us, even after we land good jobs and have the ability to stay on top of our bills.  I have always wondered whether poverty is hereditary, and I have come to believe that it is.  Not because money eludes us, even after we grow up, but because money does not fix poverty.  I’ll give you some examples from my own family’s experience.

When I was growing up, my family was constantly in a state of financial crisis.  It always seemed to surprise my father when the electric bill came in the mail, or when my mom had to spend money at the grocery store in order to feed us. 

Signing Your Life Away

One of the benefits of apartment living?  We don't get a lot of trick-or-treaters.  Hence, the teeny-tiny bowl of candy, which might be all mine by the end of the night.

Now for something appropriately spooky: the Wall Street Journal has created a list of five things you should know before you cosign for a student loan.  In reality, there's only one thing you should know before cosigning for any kind of debt - DON'T DO IT!!

I think the biggest myth out there regarding cosigning is that you're simply being a reference for the person who is going to benefit from the loan.  Nothing could be further from the truth.  When your idiot brother-in-law asks you to cosign for that speedboat he's been dreaming about, he is really asking you to assume his debt.  In the meantime, when he loses his job due to "back pain" or whatever lame excuse he comes up with, you are going to be stuck footing the bill.  And you're not even a boat person, are you?

And if your nephew can't afford tuition at the overpriced private school from which he's chosen to earn a useless degree in anthropology or underwater basket weaving, don't cosign for a private student loan!  If he needs private loans, it means he's exhausted his federal grant/loan limit, which means he is being price gouged with respect to tuition.   

Anyone out there have any cosigning horror stories?  I'd love to hear them.

Happy Halloween!